Reports have emerged alleging that Chinese bitcoin exchange executives have been forbidden from leaving the country. The travel ban has been instigated whilst the Chinese central government seeks to “clean-up” the nation’s cryptocurrency industries.
Chinese Bitcoin Exchange Executives Are Reported to Be Required to Stay in China During the Governments Cryptocurrency “Clean-Up”
It has been reported that Chinese bitcoin exchange executives must stay in China during the government’s crackdown and “clean-up” of the nation’s cryptocurrency industries. A rough translation from a story published by China’s Bjnews states that “a number of informed sources say the executives of special currency trading platforms are not allowed to leave Beijing to cooperate with the investigation. In accordance with regulatory requirements, trading platform shareholders, the actual controller, executives and financial executives need to fully cooperate with the relevant work in the clean-up period in Beijing.”
The alleged travel ban has also been reported by Australia’s Financial Review (AFR), who stated that an anonymous source close to major cryptocurrency exchange Huobi told AFR that Huobi’s founder, Li Lin, must “report to the authorities and cooperate with their work at any time” – requiring that Li Lin must remain in China.
An increased regulatory presence within China’s cryptocurrency industry has significantly reduced China’s position of dominance within the bitcoin markets since last year. Chinese trading is currently estimated to account for less roughly 10% of global trade volume, compared to approximately 90% throughout most of 2016. Analysts are expecting China’s share of global bitcoin trade to drop substantially further once all of China’s major bitcoin exchanges have ceased operations, which is expected to have occurred before the end of October.
The Travel Ban Comes Following a Significant Expansion of China’s Cryptocurrency Crackdown
The increasing interference into China’s cryptocurrency industry on the part of the state led to many insiders forecasting a rocky future for China’s bitcoin economy. An anonymous bitcoin trader told AFR that “China was the country with the most favorable approach to bitcoin but it has switched very rapidly to become the most unfriendly country for the digital currency… I’m not very optimistic about the future of bitcoin in China.” MGT Capital’s John McAfee went as far as describing China’s recent actions as “the beginning of the war between the proponents of cryptocurrency and the world governments” in a recent interview with Chinese media.
The reports of a travel ban on Chinese bitcoin exchange executives have surfaced following announcements confirming that the Chinese government will extend its cryptocurrency crackdown to target all bitcoin exchanges operating in China. The ban is also expected to target over-the-counter (OTC) trading, including that which is occurring via messaging app Wechat – which has prompted a recent migration of many users to Telegram.
Many analysts are attributing China’s cryptocurrency crackdown to major economic policies introduced during July. The policies are designed to reduce high-risk speculation throughout China’s economy, further tightening Beijing’s control over financial circulations throughout China. Martin Chorzempa of the Peterson Institute for International Economics recently wrote that “the clampdown fits into a broader set of efforts to lessen financial market risks perceived by Chinese policymakers.”
Do you think that the China’s central government will maintain its heavy handed approach with regards to bitcoin exchanges long term? Share your thoughts in the comments section below!
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Author: Samuel Haig